It wasn’t that long ago that Bill Gross stood squarely against managed futures, shouting the demise of U.S. treasuries as a viable investment from the rooftops. We disagreed with him then, believing the trend in bonds to be decidedly up.
This is where we get to say “told you so.”
From the Financial Times:
Bill Gross, manager of the world’s largest bond fund for Pimco, has admitted that it was a mistake to bet so heavily against the price of US government debt.
Mr Gross emptied his $244bn Total Return Fund of US government-related securities earlier this year in a high-profile call that has backfired as the bond market has rallied. As of Monday, Pimco’s flagship fund ranked 501th out of 589 bond funds in its category.
“Do I wish I had more Treasuries? Yeah, that’s pretty obvious,” Mr Gross told the Financial Times last week, adding: “I get that it was my/our mistake in thinking that the US economy can chug along at 2 per cent real growth rates. It doesn’t look like it can.”
Between treasuries continuing to impress the markets (despite a small slide today) and our recent research, which suggests that bonds play a crucial role in managed futures crisis performance, we’re thinking that Gross’ admission of crying into his beer after a bad call is probably coming to fruition. In round one of Bill Gross v. Managed Futures, the win, decidedly, goes go managed futures. Whether or not this trend persists remains to be seen, but for right now, we’re liking the odds on the managed futures side of things… and looking forward to the day that Bill Gross comes ’round to our side.